Today, I’m handing the blog over to my good friend, Stephanie, to talk about setting virtual assistant rates. Stephanie has a ton of experience working as a VA, and I am honored that she’s here to share her experiences!
How to Set your Virtual Assistant Rates
One of the most often asked questions that I receive is about setting rates as a VA. It seems like an easy question on the surface. But, pricing is a lot more complicated than you might think. There are many considerations that you must think about when setting your rates. It seems intimating but once you get the hang of it and state your price with pride you’ll find just the right rate to charge.
Who is Your Ideal Client?
This is the most important question to ask. You must know who your audience is to include how much money they can afford and are willing to spend on the services that you offer. Can you sell your services as an investment and prove a return on investment or do you do tasks that may not produce a measurable return on investment but still give the client peace of mind? How much is that worth to them?
Are There Enough Clients to Support Your Needs?
This is an important question that most people forget to answer. How many people out there (that you can reach) will want to pay for the services that you offer? Is it enough to allow you the lifestyle that you want and need? How many clients can you take on at a time? Can you set systems in place that make it all easier?
What Type of Value Do You Provide?
So many virtual assistants get caught up in charging hourly fees and working on an hourly basis. What’s worse is most of them charge less than they should. Never charge the going rate for a secretary because that isn’t what you do. You’re not an employee. You own your own business and need to price your services as such. It’s OK to charge hourly if you want to, but always remember that it’s more work, you get penalized for speed and it’s hard to track.
What Does Your Competition Charge?
You should always study everything your competition does, including pricing. But, make sure you’re looking at the right competition. You don’t want to compete on super low prices in low price countries. You should find the competition that is most closely related to your business model. If you can find competition in the same country, state, area that you live that will be more indicative of what you can charge.
What is Your Cost of Living?
It might not seem relevant but the cost of living where you live is very applicable. If a one bedroom apartment costs $1000 a month that needs to be something you think about when you set your prices and determine the services you’ll offer and to whom.
In fact, that should be considered as you seek out the right audience and niche. Because face it, you can be awesome and have a full client roster, but if you’re not charging enough to pay for at least the basics plus the life you want to live, what’s the point?
What is Your Break-Even Rate?
This is important to know because you need to understand what this is so that you can appreciate that you need to charge a lot more than this. Add up what it costs you to live a normal life, plus your business expenses. This is your break-even point for this purpose. For business, your real break-even is the sum of your business expenses including taxes. But for this purpose, you need to know what it costs you to maintain your current lifestyle.
What Type of Lifestyle Do You Want?
Finally, you also need to know what type of lifestyle you want. Because that will determine if you’ve chosen the right niche or not. Plus, it might be different from your current lifestyle. Some virtual assistants just want to earn grocery money while homeschooling their kids. Other virtual assistants want to own six figure plus businesses. Everything is possible if you do your due diligence to ensure that your audience understands the value you provide and if you’re realistic about your offerings and skill level.
How Many Billable Hours Can You Work?
The number of billable hours you can reasonably work is an important factor in determining and setting your virtual assistant rates. Do not assume that you can work a normal 40-hour work week and that all those hours will be billable. Be more realistic. Look at your schedule with your family and your life.
You’re going to have to work some hours each week on your business in terms of bookkeeping, marketing, and general unpaid business tasks. Let’s assume that’s 10 hours a week. Then let’s further assume that it takes you 10 more hours a week to keep your household going. That leaves only 20 hours a week that you can fill with clients.
Let’s look at how this pans out for a typical administrative VA who wants to be able to stay home with her kids. She lives in a typical town in the USA where a family can live a typical middle-class life on about 60K a year.
Let’s also assume we’ve determined our market is ripe and our value is high enough for this goal in the minds of our ideal client.
Break even for just the business equals $10,000 a year including taxes, software, and all expenses including outsourcing. So, that means you need to earn $70K a year. This breaks down to about $5834 dollars a month. This may sound like a lot to you or a little to you depending on where you live.
Don’t Forget Vacation
Let’s not forget that you take at least four weeks of vacation each year, so that leaves 20 hours a week for only 48 weeks a year for a total of 960 billable hours a year. If you did a straight hourly rate you would need to charge about $73 dollars per hour for the work that you do. It’s always a good idea to mark that number up by 1 to 2 times because taxes and expenses always end up more than you think. Let’s do it by 1.5 times.
We have now come up with $110 dollars an hour or $2200 a week for 48 weeks. That’s more than 100K a year, by the way.
When you first look at that number you probably have some strong feelings about it depending on what your niche is. The truth is, most admin virtual assistants won’t be able to charge that much hourly. But, if this is what you need to earn, where there is a will there is a way. Enter, value based package pricing.
Create Value-Based Packages
When you create value based packaging you can avoid hour tracking for clients, and when you niche down to a very laser focused offering you will get super-fast at it the more you do it. I’m not talking about retainer packages based on hours. No, this is different. With value-based packaging, you are paid month after month even if your customer goes on vacation based on your contract.
You do need to know about how much time it takes you to do things to create packages and price them accordingly, but you don’t need to inform anyone about that when you create value based packages. You’ll create a package price that will offer “up to” a certain number of services each week or month that your customer needs.
For example, you look at the services you offer and you realize that in your administrative capacity you’re doing a lot of social media updates, customer service email management, calendar management. Maybe you’re even doing some WordPress updates.
Instead of doing these things on an hourly basis, create packages that fit together for each separate type of work that you do.
Social Media Management Package
- 5 Updates Per Week Per Network
- 3 Social Media Networks
- Share New Content from Blog on Social Networks
- Content Idea Research
- Search Engine Optimization
- Analytics Report
$350 per month
WordPress Maintenance Package
- Upload Up to 100 Individual Pieces of Content or Products
- Update WordPress Versions as Needed
- Update Plugins as Needed
- Install Up to 5 New Plugins Per Month
- Edit Up to 25 Pages of Content Each Week
- Keep Site Backed Up
- Restore if Site is Corrupted
$250 per month
Simply put some tasks that fit together into a package. If you find that you always do the same tasks for a client, put them into a package for the next client. Then when it’s time to renew your contract help the client understand that package rates are better and have no surprises for them like a surprise monthly bill for hourly work.
Look at what you are already doing and figure out how you can package it as needed. The way I like to do packages is I interview the client first, and then I submit specialized package pricing in the form of a proposal to each individual potential client based on their needs.
For example, the main thing I do is plan, organize and write content. A typical package might look like this:
Content Management Package
- Craft 3 SEO Titles & Blog Post Ideas Weekly
- 3 Blog Posts Written Weekly
- All Posts Edited, Formatted, Uploaded & Scheduled Weekly
- Your Proper Affiliate Links Added as Needed to Each Post
- Your CTA Added as Needed to Each Post
- 1 Stock Photo Image Per Post
- All Posts Optimized for Search
- Each Post Promoted to Up to 3 of your Social Media Networks with Unique Blurb
- Status Calls Each Month Not to Exceed One Hour
Package Price: $450 Monthly
When you take the pressure off yourself and your client you will also be removing a lot of stress. Once you set the package rates your job now is to provide the best customer service possible. Find ways to over deliver so that they’re happy. Since it’s a monthly contract you already know what to do and can do it in advance instead of waiting for instructions. Add the words, “For additional work an hourly fee of XX dollars will be charged and invoiced on the 1st of each month.”
Don’t skip getting a signed contract so that you both understand exactly what you’re going to do for them each period. You can make the contracts yearly or some other period that works for you and your client. Each month try to do just a little bit more that is in the contract so that they know they’re getting big value by working with you.
If you want to learn more about working as a VA and getting paid as a VA as well as how to get your family on board with your VA business, please join me at the VA Networking VA Virtuosos Online Conference starting next week. If you’d like to work with me, please see my website.
Stephanie WatsonAuthor | Content Strategist | Content Writer | Virtual Assistant CoachWith more than 20 years experience working from home in a variety of roles such as HTML Website Designer, Internet Marketer, Template Bender and Virtual Assistant, today Stephanie is an author and content strategist who organizes, plans, writes and implements content strategies for business owners through her business Barry Publishing.